447 S.W.3d 740
Mo. Ct. App.2014Background
- Chisholm applied for and received a Vantage Visa Gold credit line in 2006 and opted into optional credit life and credit disability insurance via the credit application.
- The credit agreement set payment terms (monthly minimums, 12.90% APR) but did not expressly condition Chisholm’s payment obligations on procurement or activation of insurance.
- Chisholm became disabled (December 31, 2008), contacted Vantage and Transamerica (the insurer) about disability benefits, and stopped making payments after December 16, 2010.
- Vantage sued Chisholm for breach of the credit agreement seeking unpaid balance, interest and fees; Chisholm counterclaimed against Vantage and Transamerica for vexatious refusal to pay, fraud, MMPA violation, and breach of contract related to the disability coverage.
- At summary judgment the trial court entered judgment for Vantage on its breach claim and on all counterclaims; Chisholm appealed. The Court of Appeals reviews de novo.
Issues
| Issue | Plaintiff's Argument (Vantage/Claimant) | Defendant's Argument (Chisholm) | Held |
|---|---|---|---|
| Vantage’s breach of contract claim (Vantage seeks unpaid balance) | Vantage: undisputed contract, Chisholm breached by nonpayment; entitled to judgment | Chisholm: Vantage failed to perform conditions precedent (procure disability coverage), so cannot enforce payments | Held for Vantage. No genuine dispute: Chisholm’s payment duty not conditioned on Vantage procuring insurance; summary judgment affirmed for Vantage |
| Vexatious refusal to pay (counterclaim) | Vantage: credit agreement is not an insurance policy; thus Chisholm cannot show an insurance policy with Vantage | Chisholm: Vantage sold the credit disability insurance and refused to provide coverage | Held for Vantage. Agreement lacks essential insurance elements; summary judgment affirmed on this claim |
| Fraud (counterclaim) | Vantage: Chisholm failed to plead any specific false representation with required particularity | Chisholm: relied on Vantage’s representations that coverage would be provided if disabled | Held for Vantage. Fraud not pled with requisite specificity; summary judgment affirmed on this claim |
| Breach of contract (counterclaim alleging agency/processing failure) | Vantage: not an insurer and performed obligations (reported claim); no breach | Chisholm: alternatively pleads Vantage acted as Transamerica’s agent and failed to process/forward his claim, causing loss of coverage; factual dispute exists about whether Vantage forwarded claim/forms | Held for Chisholm in part. Court reverses summary judgment on breach counterclaim due to genuine factual dispute about whether Vantage processed/forwarded the disability claim; remanded on that counterclaim only |
Key Cases Cited
- ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993) (standard for summary judgment and burdens for claimant vs. defending party)
- Keveney v. Mo. Military Acad., 304 S.W.3d 98 (Mo. banc 2010) (elements of breach of contract)
- Dhyne v. State Farm Fire & Cas. Co., 188 S.W.3d 454 (Mo. banc 2006) (elements of vexatious refusal to pay claim)
- Podlesak v. Wesley, 849 S.W.2d 728 (Mo. App. S.D. 1993) (summary judgment precluded where factual disputes affect outcome)
- Juengel Const. Co. v. Mt. Etna, 622 S.W.2d 510 (Mo. App. E.D. 1981) (conditions precedent disfavored and strictly construed)